On April 23, 2026, Brent crude futures briefly topped $106 per barrel—up more than 3% intraday—while WTI climbed above $97, gaining 4% on the day. Since the escalation of US-Iran tensions on February 28, Brent crude has risen 46%, with an intraday peak of +65% recorded on March 9.

Yet the more important story is what was already happening before the geopolitical trigger. Between January 1 and February 27, 2026—when international oil prices were still stable—more than 100 domestic Chinese chemical raw materials had already recorded meaningful price increases. The Strait of Hormuz crisis did not start the fire; it poured fuel on one already burning.

The most extreme moves have been concentrated in specialty chemicals with limited production capacity and inelastic industrial demand.

Reducing agent prices skyrocketed from approximately 25,000 yuan per metric ton at the start of 2026 to over 100,000 yuan per metric ton by late April—a 300% increase in under four months. Trimellitic anhydride (TMA), a key feedstock for high-performance polyimide resins, plasticizers, and coatings, hit a multi-year low near 13,000 yuan per metric ton in early 2026 before rebounding to around 43,000 yuan—a 230% rally.

Battery-grade materials were already in motion months earlier. Lithium hydroxide, lithium oxychloride, and both industrial-grade and battery-grade lithium carbonate all posted gains of 40–50% in the January–February window, at a time when crude oil had not yet moved.

• Reducing Agents — From ~25,000 yuan/ton to 100,000+ yuan/ton — up 300% since January 2026.
• Trimellitic Anhydride (TMA) — From 13,000 yuan/ton to ~43,000 yuan/ton — up 230%, driven by polyimide and plasticizer demand.
• Battery-Grade Lithium Carbonate — Up 40–50% before any crude oil movement, reflecting structural undersupply in energy materials.
• Lithium Hydroxide & Lithium Oxychloride — Both battery-grade variants up 40–50% in the Jan–Feb period alone.

Upstream chemical price inflation has transmitted aggressively into coatings raw materials. Across acrylates, glycol ether solvents, and ketone solvents, over 70% of major product categories have risen more than 50% compared to November 2025 average pricing.

This breadth of movement—consistent with the broader chemical sector’s 68% average increase—signals that coatings raw material inflation is not an anomaly or a spot-market squeeze. It reflects systematic cost pressure passing through every layer of the supply chain.

A common industry assumption is that chemical raw material prices will normalize once the US-Iran conflict ends and the Strait of Hormuz reopens. This view underestimates the structural dimensions of the current cycle.

First, the upward price trend in Chinese chemical raw materials was established well before February 28. Industry insiders noted publicly that even without geopolitical disruption, Q1 and Q2 price increases were planned to correct what had become a prolonged mismatch between market prices and production economics. At prior price levels, margins across the supply chain had become unsustainable.

Second, even if the Strait of Hormuz reopens, oil production infrastructure across parts of the Middle East has sustained damage that cannot be repaired quickly. Simultaneously, strategic petroleum reserve buildup by multiple nations in response to the conflict will sustain elevated demand for crude, keeping oil—and petrochemical feedstocks—in a structurally tight market.

Third, China’s policy environment has shifted. The 2025 Central Economic Work Conference explicitly paired ‘reasonable price recovery’ with ‘stable economic growth’ as dual monetary policy objectives for the first time. The 2026 Government Work Report targets a consumer price inflation rate of approximately 2%, actively seeking to reverse deflationary pressure. This policy posture removes a key structural brake that had been suppressing raw material pricing power.

The combination of a broken geopolitical supply corridor, structural demand recovery, damaged Middle East production capacity, and a pro-reflation policy environment in China creates conditions where a return to 2025 price lows is highly unlikely in the near term.

For procurement and supply chain teams, the implication is clear: budgets and contract structures built around 2025 pricing are no longer viable. Cost benchmarks need to be reset, and procurement strategies that relied on last-minute spot buying or low-price vendor selection face heightened execution risk.

For manufacturers across the chemicals, coatings, electronics, and industrial materials sectors, margin compression will be severe for companies without pricing power. Mid-to-large enterprises are accelerating cost reduction and operational efficiency programs. Low-price competitors with thin margins are facing existential pressure as input costs eliminate what little buffer remained.

Companies navigating this environment effectively are focusing on three levers: supply chain diversification away from single-source Middle East feedstocks, longer-term offtake agreements that lock in volume if not price, and accelerated substitution programs to evaluate alternative chemistries where technical specifications allow.

Transparency across the supply chain has also become a competitive differentiator. Buyers who understand their suppliers’ cost structures—rather than simply pushing for the lowest price—are better positioned to maintain supply continuity when allocations tighten.

• Diversify Feedstock Sources — Reduce dependency on Middle East-origin crude derivatives by qualifying alternative supply chains in advance.
• Lock Volume, Not Just Price — Offtake agreements that secure allocation are valuable even at higher price points when spot availability is uncertain.
• Accelerate Material Substitution — Evaluate alternative chemistries for cost-sensitive applications—particularly solvents and commodity acrylates where substitutes exist.
• Reset Cost Baselines — Financial models and customer pricing structures built on 2025 inputs are outdated and need immediate revision.
• Engage Suppliers as Partners — Collaborative relationships with suppliers—grounded in understanding their cost pressures—improve allocation priority when supply tightens.

Chemical raw material prices are in a structural upcycle with multiple self-reinforcing drivers—geopolitical disruption accelerated an existing trend, and neither factor alone is likely to reverse quickly.